Shupe v. Asplundh Tree Expert Co., 13-5747

Rebecca Shupe, Plaintiff-Appellant, v. Asplundh Tree Expert Company, Defendant-Appellee.

No. 13-5747

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

FILED: May 22, 2014

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION

File Name: 14a0382n.06

ON APPEAL FROM THE UNITED

STATES DISTRICT COURT FOR

THE EASTERN DISTRICT OF

KENTUCKY

OPINION

BEFORE: CLAY and DONALD, Circuit Judges; MAYS, District Judge.^*

Samuel H. Mays, District Judge. Plaintiff-Appellant Rebecca Shupe ("Shupe") appeals the district court's order granting summary judgment to her former employer, Defendant-Appellee Asplundh Tree Expert Company ("Asplundh") in her suit for sexual harassment, gender discrimination, and wrongful termination. For the reasons below, we AFFIRM the judgment of the district court.

I.

Asplundh hired Shupe to work as a Permission Taker/Pre-Planner in its Lexington, Kentucky offices in August 2008. As acondition to her at-will employment, Shupe was a required to sign several forms, including a "Limitation on Time to File Claims or Lawsuits" (the "Waiver"). Shupe signed and dated the Waiver on August 15, 2008.

The single-page Waiver provides that:

I agree that any claim, administrative claim or lawsuit relating to my service with [Asplundh] or any of its subsidiaries must be filed no more than six (6) months after the date of the employment action that is the subject of the claim or lawsuit, except as may be provided otherwise in a collective bargaining agreement currently in effect. I waive any statute of limitations to the contrary.

I have read and understand the contents of this limitation and am fully able and competent to complete it.

The words "IMPORTANT NOTICE" in larger font appear at the top and bottom of the Waiver. The words "LIMITATION ON TIME TO FILE CLAIMS OR LAWSUITS" and "READ CAREFULLY BEFORE SIGNING" also appear at the top of the Waiver. The words "PLEASE READ" in larger font appear at the bottom of the Waiver.

Shupe continued to work for Asplundh until she was terminated in August 2011. Shupe claims that she was wrongfully terminated in retaliation for complaining of sexual harassment and gender discrimination by her supervisor at Asplundh, who was also her ex-husband.

Shupe filed a complaint against Asplundh in the Circuit Court of Fayette County, Kentucky, on August 10, 2012. Thecomplaint was filed more than six months after she had been terminated. Shupe alleged that Asplundh had violated the Kentucky Civil Rights Act, K.R.S. §§ 344.010, et seq., when she was (1) subjected to sexual harassment by her supervisor, her former husband; (2) terminated based on her gender and age; and (3) terminated in retaliation for complaining about her former husband's actions.

When Asplundh removed the action to the United States District Court for the Eastern District of Kentucky, Shupe filed a motion to remand the case to the state court on the basis that her claims did not meet the minimum amount in controversy for diversity jurisdiction. The district court disagreed and denied her motion to remand.

Asplundh then filed a motion for summary judgment, arguing that Shupe's complaint, filed almost a year after her termination, was barred by the six-month limitations period in the Waiver she had signed as a condition of her employment.

The district court granted the motion and Shupe filed this timely appeal. On appeal, Shupe argues (1) that the district court lacked subject matter jurisdiction because her claims did not meet the minimum amount in controversy requirement for diversity jurisdiction, and (2) that her waiver concerning the six-month limitations period was invalid and unenforceable.

II.

Under 28 U.S.C. § 1291, this Court has "jurisdiction of appeals from all final decisions of the district courts of the United States." Because the district court's grant of summary judgment for Asplundh disposed of all issues relevant to this appeal, this Court has jurisdiction.

A. Diversity Jurisdiction and the Minimum Amount-In-Controversy Requirement

The denial of a motion to remand for lack of subject matter jurisdiction is reviewed de novo. Music v. Arrowood Indem. Co., 632 F.3d 284, 286 (6th Cir. 2011) (internal citation omitted). "If removal of a civil action is sought on the basis of the jurisdiction conferred by [28 U.S.C. § 1332(a)], the sum demanded in good faith in the initial pleading shall be deemed to be the amount in controversy . . . ." 28 U.S.C. § 1446(c)(2). A court must conduct a "fair reading" of the allegations in the complaint to determine the amount in controversy. Hayes v. Equitable Energy Res. Co., 266 F.3d 560, 573 (6th Cir. 2001).

"[T]he notice of removal may assert the amount in controversy if the initial pleading seeks . . . (ii) a money judgment, but the State practice either does not permit demand for a specific sum or permits recovery of damages in excess of the amount demanded . . . ." 28 U.S.C. § 1446(c)(2)(A)(ii).Kentucky has such a practice. Kentucky Rule of Civil Procedure 8.01(2) states that, "In any action for unliquidated damages the prayer for damages in any pleading shall not recite any sum as alleged damages other than an allegation that damages are in excess of any minimum dollar amount necessary to establish the jurisdiction of the court . . . ."

A removal action is only proper based on the amount in controversy asserted in the removal notice "if the district court finds, by the preponderance of the evidence, that the amount in controversy exceeds the amount specified in [28 U.S.C. § 1332(a)]." 28 U.S.C. § 1446(c)(2)(B). This Court has held that federal jurisdiction in a diversity case is determined at the time of removal. Ahearn v. Charter Township of Bloomfield, 100 F.3d 451, 453 (6th Cir. 1996) (internal citations omitted). "The party seeking removal bears the burden of demonstrating that the district court has original jurisdiction." Eastman v. Marine Mech. Corp., 438 F.3d 544, 549 (6th Cir. 2006) (internal citations omitted). "The party requesting removal must set forth, in the notice of removal, specific facts supporting the assertion that the amount in controversy exceeds the amount required by statute." Nat'l Nail Corp. v. Moore, 139 F.Supp.2d 848, 850 (W.D. Mich. 2001) (citing Laughlin v. Kmart Corp., 50 F.3d 871, 873 (10th Cir. 1995)). "[B]ecause lack of jurisdiction would make any decree in the case void and thecontinuation of litigation in federal court futile, the removal statute should be strictly construed and all doubts resolved in favor of remand." Eastman, 438 F.3d at 549-50 (alteration in original) (internal citations omitted).

A successful claim under the Kentucky Civil Rights Act entitles a plaintiff to "actual damages." K.R.S. § 344.450. "Actual damage is most appropriately defined as all those damages directly and naturally resulting, in the ordinary course of events, from the injury in question." Mitchell v. Seaboard Sys. R.R., 883 F.2d 451, 453 (6th Cir. 1989) (internal citation omitted). Actual damages include broader relief than Title VII. Id. at 454 (internal citation omitted). Actual damages include back pay, front pay, lost benefits, humiliation, emotional distress, embarrassment, and attorney's fees. Williamson v. Aetna Life Ins. Co., 481 F.3d 369, 376 (6th Cir. 2007); Mitchell, 883 F.2d at 452-53; Meyers v. Chapman Printing Co., Inc., 840 S.W.2d 814, 817 (Ky. 1992) (internal citation omitted).

It is appropriate to consider back pay beyond the time of removal when a plaintiff seeks an award for back pay that includes future accruals. Weaver v. A.T.&T. Corp., 2010 WL 2521462, at *2 (W.D. Ky. June 18, 2010) (citing Gafford v. Gen. Elec., 997 F.2d 150, 160-61 (6th Cir. 1993)). There is no statutory limit on damages for "emotional distress" under theKentucky Civil Rights Act. Childers Oil Co., Inc. v. Adkins, 256 S.W.3d 19, 28 (Ky. 2008).

Claims for punitive damages should be included in the amount-in-controversy, "unless it is apparent to a legal certainty that such cannot be recovered." Hayes v. Equitable Energy Res. Co., 266 F.3d 560, 572 (6th Cir. 2001) (internal citation omitted). Punitive damages are not available under the Kentucky Civil Rights Act. Kentucky Dep't of Corr. v. McCullough, 123 S.W.3d 130, 139-40 (Ky. 2003).

Punitive damages are available against a defendant who acted grossly negligently toward a plaintiff. Kinney v. Butcher, 131 S.W.3d 357, 358-59 (Ky. Ct. App. 2004). "[T]he prevailing understanding defines gross negligence as a 'wanton or reckless disregard for the safety of other persons.'" Id. "It is not necessary that the jury find the defendant to have acted with express malice; rather, it is possible that a certain course of conduct can be so outrageous that malice can be implied from the facts of the situation." Id. Punitive damages must be proven by clear and convincing evidence under Kentucky law. K.R.S. § 411.184(2).

B. The District Court Properly Determined that Plaintiff's Claims Exceeded $75,000.00.

In compliance with Kentucky Rule of Civil Procedure 8.01(2), Shupe's complaint does not state an amount incontroversy. She alleges that her damages exceed the minimum amount necessary to confer jurisdiction on the Fayette County Circuit Court. The minimum amount necessary to confer jurisdiction in Fayette County is $5,000.00.

Shupe's complaint alleges that she suffered damages for "embarrassment, physical pain and suffering, and emotional distress, requiring [her] to incur medical treatment and expenses for same" as a result of Asplundh's failure to stop the sexual harassment to which she was subjected. The complaint alleges that Shupe is entitled to damages for "loss of wages and employment benefits, and that she continues and will continue to suffer said damages . . ." due to her wrongful termination.

Shupe alleges that Asplundh "falsely accus[ed] her of knowing of the wrongful conduct of Defendant's supervisor concerning Defendant's property." That conduct was allegedly "grossly negligent, outrageous, extreme, intentional, [and] designed to...